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Unformatted text preview: ees are encouraged to go on sabbaticals 52 35 18 Early retirement is increased 5 46 3 0 29 11 43 Recruiting is cut back The share of temporary employees is increased –15 48 19 63 Employees are laid off Head count –7 85 Employees are forced to take their vacations Part-time work arrangements are increased –3 50 9 Pension plans are reduced –8 42 21 Base salaries are reduced Effectiveness in comparison with the average (%) 48 24 21 –15 4 30 4 17 47 0 3 33 Less effective More effective Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA analysis. C P A Exhibit 14. Labor Cost Reduction Was Often Achieved by Reducing Head Count >40 In 48% of companies, labor cost reduction equaled head count reduction In 34% of companies, labor cost reduction was higher than head count reduction 1 21–40 1 1 3 4 11–20 Labor cost reduction in 2009 (%) 2 2 6 7 2 6 6 16 4 1 7 6 4 5–10 2–4 <2 14 <2 In 13% of companies, labor cost reduction was lower than head count reduction 2 2–4 5–10 11–20 21–40 Head count reduction in 2009 (%) >40 Percentage of respondents Sources: Proprietary Web survey with 5,561 responses; 731 responses in this section; BCG/WFPMA analysis. Note: Values below 1% not shown. similar approaches, such as communications programs, underlines their importance. Using Effectiveness and Engagement to Stay Lean and Become Flexible During economic crises, low-performing companies react by implementing a vast array of cutback and flexibility measures, relying heavily on the former. (See Exhibit 15.) High-performing companies use a more selective and balanced approach—which is better suited to sustaining the strength of the workforce as a competitive differentiator. These results underscore the importance of developing a workforce strategy that can carry a company through good times and bad. A critical task in developing such a strategy is selecting which combination of workforce measures to implement, using two criteria: effect on employee engagement and effectiveness. As a general principle, cutback measures are relatively ineffective and erode employee engagement. By contrast, flexibility measures tend to be more effective, and engagement is higher in companies that rely on them. Taking a closer look at the differences among the measures, however, will help companies select the right mix. Exhibit 16 organizes the measures according to their effectiveness and the employee engagement they foster. The upper-right quadrant represents the ideal, including relatively effective measures that also drive the highest engagement. Virtually all of the choices in this quadrant are flexibility measures: job mobility, streamlined processes, tightened hiring criteria, and flexible work arrangements. (See the sidebar “KLM: Keeping the Family Together” for an example of job mobility.) T B C G • W F P M A Exhibit 15. High-Performing Companies Are More Selective in Their Use of Specific Me...
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This document was uploaded on 09/30/2013.

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